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ULA prices
by
georgesowers
on 20 May, 2014 14:01
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Yesterday at the National Space Symposium in Colorado Springs, ULA revealed the following pricing information. I think it will greatly inform the ongoing debate and aleviate a lot of pointless speculation.
1. If you take the complete contract value of all of ULA's backlog missions and the total block buy inclusive of the capability contracts (which many on this forum like to call a subsidy---incorrectly) and divide by the total number of missions you get an average mission price of $225M. This includes all missions, DOD, NASA commercial, Atlas V 401 thru Delta IV heavy.
2. Within the current block buy, the total price of an Atlas V 401 (comparable to a Falcon 9 1.1) is $164M. This number is arrived at by taking the incremental price as spelled out in the contract and adding an allocation of the capability cost. The allocation was on a simple per mission basis.
3. The incremental price of an Atlas V 401 is less than $100M. This is the cost to the USG to increase the block buy from 26 missions to 27. We are not giving the specific number at this time.
All of these numbers are based on committed, negotiated, contractual values---not marketing brochures or internet pages. These are our current prices, but ULA is embarked on an agressive cost reduction program with very challenging future targets. More to come about that.
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#1
by
edkyle99
on 20 May, 2014 14:11
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
Quite a discrepancy.
- Ed Kyle
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#2
by
SWGlassPit
on 20 May, 2014 14:16
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What I had read in another article (don't remember where) is that the $420M price tag actually includes USAF's certification costs for the F9 and other costs not directly related to ULA.
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#3
by
Lee Jay
on 20 May, 2014 14:16
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... inclusive of the capability contracts (which many on this forum like to call a subsidy---incorrectly) ...
I don't know enough about these contracts to characterize them. Perhaps you could provide a more correct characterization?
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#4
by
JBF
on 20 May, 2014 14:41
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... inclusive of the capability contracts (which many on this forum like to call a subsidy---incorrectly) ...
I don't know enough about these contracts to characterize them. Perhaps you could provide a more correct characterization?
It is a direct payment by the government to maintain private facilities. The very definition of a subsidy.
sub·si·dy noun \ˈsəb-sə-dē, -zə-\
: money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function
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#5
by
sublimemarsupial
on 20 May, 2014 14:44
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Thanks for taking the time to share and answer questions Dr. Sowers. Can you please clarify how exactly the ELC is included in your quoted Atlas V price of $164 million? If I take the publicly available figure of ~$1 billion for the ELC in 2013 and divide by 11 mission that is $90 million per mission, or just over 50% of the per mission cost, is this correct?
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#6
by
Lee Jay
on 20 May, 2014 14:54
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... inclusive of the capability contracts (which many on this forum like to call a subsidy---incorrectly) ...
I don't know enough about these contracts to characterize them. Perhaps you could provide a more correct characterization?
It is a direct payment by the government to maintain private facilities. The very definition of a subsidy.
sub·si·dy noun \ˈsəb-sə-dē, -zə-\
: money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function
I would prefer the answer of Dr. Sowers, however I would point out that this is not as cut-and-dried as you are claiming. For example, it could be to maintain facilities or equipment that would otherwise not be necessary for a commercial enterprise to maintain if not for special requirements put in place by the government.
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#7
by
jtok202
on 20 May, 2014 15:26
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All of these numbers are based on committed, negotiated, contractual values---not marketing brochures or internet pages. These are our current prices, but ULA is embarked on an agressive cost reduction program with very challenging future targets. More to come about that.
These numbers are based upon negotiated contractual values that nobody can seem to justify or discuss.
From GAO report on EELV
"The ELC cost-reimbursement contract was not transparent according to DOD officials, who had limited understanding of the activities funded under this contract. Additionally, minimal insight into contractor cost or pricing data meant DOD may have lacked sufficient knowledge to negotiate fair and reasonable launch prices."
It seems a bit hypocritical to take a jab at SpaceX's prices as both of you are non-specific about the final cost.
It's great that you want to engage with the community at large but this stuff just comes across as you trying to sell a lemon.
I would prefer the answer of Dr. Sowers, however I would point out that this is not as cut-and-dried as you are claiming. For example, it could be to maintain facilities or equipment that would otherwise not be necessary for a commercial enterprise to maintain if not for special requirements put in place by the government.
In no way is the ELC not a subsidy, and it seems pretty obvious to me that this is an attempt to focus the language around it in a way that doesn't have negative connotations. If I feared that my primary customer was going to pull significant business from me, I also wouldn't be eager to have a portion of our services considered a subsidy.
3. The incremental price of an Atlas V 401 is less than $100M. This is the cost to the USG to increase the block buy from 26 missions to 27. We are not giving the specific number at this time.
Perhaps I am reading this portion wrong? It sounds like there is a large step between this $100M incremental price and the average mission price of $225M. I hope this means the hardware itself is $100M and the total cost is only 2.25 times more.
I work with large construction projects and numbers all the time, anytime somebody quotes me numbers and goes don't worry we got it right I have serious concerns.
Jacob
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#8
by
woods170
on 20 May, 2014 15:31
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
Quite a discrepancy.
- Ed Kyle
There is a number of billions of US dollars in the "almost 64 billion" figure that is 'sunk cost', and thus not charged in mission prices. Taking the entire cost of the EELV program and dividing it by the number of launches assumes amortization of development and other non-refundable costs thru launches. However, it does not work that way.
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#9
by
Jim
on 20 May, 2014 15:39
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
EELV program encompasses more than ULA costs. There are costs of running the program office, Aerospace support, other contractor support, heck even Spacex certification costs are part of the EELV program costs.
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#10
by
LouScheffer
on 20 May, 2014 15:43
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1. If you take the complete contract value of all of ULA's backlog missions and the total block buy inclusive of the capability contracts [...] and divide by the total number of missions you get an average mission price of $225M. This includes all missions, DOD, NASA commercial, Atlas V 401 thru Delta IV heavy.
I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
Quite a discrepancy.
In particular, 152 missions at $225M each is $34.2 billion. Where does the additional $29.7 billion in the GAO estimate go?
Also, if the Atlas is cheap, but the average is $225M, then the Delta must be hellishly expensive.
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#11
by
edkyle99
on 20 May, 2014 15:45
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
Quite a discrepancy.
- Ed Kyle
There is a number of billions of US dollars in the "almost 64 billion" figure that is 'sunk cost', and thus not charged in mission prices. Taking the entire cost of the EELV program and dividing it by the number of launches assumes amortization of development and other non-refundable costs thru launches. However, it does not work that way.
So the presentation ignored about half of the real total cost of the program to the government?
- Ed Kyle
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#12
by
su27k
on 20 May, 2014 15:59
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3. The incremental price of an Atlas V 401 is less than $100M. This is the cost to the USG to increase the block buy from 26 missions to 27. We are not giving the specific number at this time.
I'm going to hazard a guess that we're supposed to compare this less than $100M number to Elon Musk's quote of $90M for a USAF F9 v1.1 flight? But if Atlas V 401 and F9 v1.1's price difference is less than $10M, how come F9 v1.1 has more than 20 commercial launches in its manifest while Atlas V 401 has none?
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#13
by
Jim
on 20 May, 2014 16:02
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while Atlas V 401 has none?
No, 3
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#14
by
AJW
on 20 May, 2014 16:28
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while Atlas V 401 has none?
No, 3
The GAO report also raised the concern that when ULA sold launches to other customers using facilities and infrastructure paid for by the EELV program, the reimbursements were too small.
In just two months we went from the GAO reporting "little insight into EELV launch costs", and now we are given numbers but no details on how the numbers were determined. Even if the numbers are fabricated, competition, or at least the fear of it, is clearly starting to have an impact.
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#15
by
woods170
on 20 May, 2014 17:15
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
EELV program encompasses more than ULA costs. There are costs of running the program office, Aerospace support, other contractor support, heck even Spacex certification costs are part of the EELV program costs.
I find it somewhat incredible that the items you listed would be responsible for a nearly 30 billion US dollar gap from the GAO report. Is the program office hellishly expensive? Hell yeah, I will believe that. Is Aerospace support hugely expensive? Hell yeah, I will believe that. Is other contractor support very expensive? Hell yeah, I will believe that. Those things combined explain 30 billion US dollars? Sorry, no, not gonna believe that. Too big a pile of money for that.
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#16
by
R7
on 20 May, 2014 17:31
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I'm going to hazard a guess that we're supposed to compare this less than $100M number to Elon Musk's quote of $90M for a USAF F9 v1.1 flight? But if Atlas V 401 and F9 v1.1's price difference is less than $10M, how come F9 v1.1 has more than 20 commercial launches in its manifest while Atlas V 401 has none?
a)
commercial price difference is greater?
b) Atlas V has less right-shifting?
c) gremlins?
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#17
by
Jim
on 20 May, 2014 17:36
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I'll have to understand how this meshes with the 2014 GAO number for the EELV program, which is $63.9237 billion over 152 launches, for an average of $420.551 million per launch.
EELV program encompasses more than ULA costs. There are costs of running the program office, Aerospace support, other contractor support, heck even Spacex certification costs are part of the EELV program costs.
I find it somewhat incredible that the items you listed would be responsible for a nearly 30 billion US dollar gap from the GAO report. Is the program office hellishly expensive? Hell yeah, I will believe that. Is Aerospace support hugely expensive? Hell yeah, I will believe that. Is other contractor support very expensive? Hell yeah, I will believe that. Those things combined explain 30 billion US dollars? Sorry, no, not gonna believe that. Too big a pile of money for that.
Those aren't ULA's or DOD's numbers, but GAO's
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#18
by
Jim
on 20 May, 2014 17:37
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I'm going to hazard a guess that we're supposed to compare this less than $100M number to Elon Musk's quote of $90M for a USAF F9 v1.1 flight? But if Atlas V 401 and F9 v1.1's price difference is less than $10M, how come F9 v1.1 has more than 20 commercial launches in its manifest while Atlas V 401 has none?
Because those prices are associated and enabled by the block buy.
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#19
by
rcoppola
on 20 May, 2014 17:42
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We were losing billions of dollars worth of critical payloads. Shuttle turned out not to be the answer. And so, yes, the USG spent billions to mitigate against further unacceptable risk and ensure a successful launch capability. The subsequent EELV program has been an amazing success. And anybody who lived through the sequence of 90s launch failures would be genuinely suspect of rapid change after the expenditure of so much effort, time and money. But we have indeed reached an inflection point. As things always do.
As exemplified by the recent posts of Dr. Sowers and the public engagement WTR pricing transparency from Mr. Gass, I'd say we are seeing proof positive that competitive forces are doing what they do best...drive change. And in this case, that's a good thing.
I look forward to a post block-buy world, when SpaceX is fully certified, fully capable of vertical integration, Atlas V engine configuration is stable/predictable and the USG competes launches on a new and competitive open domestic launch market. It's coming.
I especially look forward to future communications from Dr. Sowers wrt the following:
1. Atlas V Engine stabilization and/or replacement strategy
2. Mitigation wrt Capability Contract reductions (inevitable post block-buy)
3. What are you forecasting as the appropriate future mix of USG and Commercial launches to mitigate a potential reduction in USG launches? (The original concept was 70% commercial and 30% USG?)
4. What is the one or two most exciting innovations that ULA is working on to help position it for the next 20 years?